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Before you close the chapter on your working years, it’s important to ensure your transition to retirement is smooth and your financial future is secure. If you’re getting close to retirement, this easy-to-follow checklist will help you prepare with confidence.

1. Define Your Retirement Lifestyle and Budget

Start by envisioning what your retirement will look like. Will you travel frequently, downsize your home, or pursue hobbies? Your lifestyle choices will shape your budget, so it’s important to estimate your expected monthly and annual expenses. Don’t forget to include essentials like housing, food, healthcare, and transportation, as well as discretionary spending for travel, entertainment, and gifts.

Creating a realistic budget now helps you understand how much income you’ll need and guides your withdrawal strategy once you retire. Fidelity’s Retirement Income Calculator can help you estimate how your savings and income sources can cover your expenses over time. 

2. Review Your Social Security Benefits

Deciding when to claim Social Security benefits is one of the most important retirement decisions you’ll make. Claiming early can mean smaller monthly payments, while waiting until full retirement age or later can increase your monthly benefits. Fidelity’s Social Security Benefits Calculator allows you to explore how claiming at different ages can affect your monthly income and total lifetime benefits.

If you’re married, consider spousal and survivor benefits as well. Coordinating Social Security with your other income sources can help maximize your overall retirement income.

3. Understand Your Medicare Options

Healthcare is a major expense in retirement, so it’s crucial to understand your Medicare coverage options. Fidelity’s Medicare Services website offers a comprehensive resource to help you compare plans, understand coverage details, and enroll in the right Medicare plan for your needs. Plus, you can schedule a phone consultation with a Fidelity licensed insurance agent who can answer your questions and guide you through the enrollment process.

Remember, enrolling on time is important to avoid penalties and gaps in coverage. 

4. Evaluate Your Retirement Income Sources 

Your retirement income will likely come from multiple sources: Social Security, pensions, 401(k) or other retirement accounts, and possibly part-time work or annuities. Fidelity’s step-by-step Retirement Decision Guide provides support to help you maximize your Social Security benefits, understand your health insurance options, adjust your investments, explore other ways to generate income, and more. 

5. Consider Your Drawdown Strategy

As you shift from saving to spending in retirement, having a clear plan for withdrawing money is essential. Thoughtful drawdown strategies help your savings last while providing steady income. Consider these common approaches:

• Systematic Withdrawals: Taking regular, planned distributions—monthly or quarterly—from your retirement accounts to create a reliable income stream and help manage your budget.
• Bucket Strategy: Dividing savings into “buckets” based on when you’ll need the money—keeping some in cash for near-term expenses, some in conservative investments for mid-term needs, and some in growth investments for the long term. This balances access to cash with growth potential. For more on being strategic about which accounts to use at what point, read “Let’s Talk … About Which Accounts to Use in Retirement.”
• Required Minimum Distributions (RMDs): Starting at age 73, the IRS requires minimum withdrawals from tax-deferred accounts like IRAs and 401(k)s. Understanding when and how much to withdraw helps avoid penalties and manage taxes.
• Annuities: Annuities are insurance products that provide guaranteed income for life or a set period. They can offer peace of mind by covering essential expenses but should be reviewed carefully with a financial advisor due to fees and terms.

6. Check Your Estate Planning Documents

Make sure your will, power of attorney, healthcare proxy, and beneficiary designations are up to date. These documents ensure your wishes are honored and can help your loved ones avoid unnecessary legal complications. Fidelity provides educational resources to help you understand the importance of estate planning and keep your documents current.

7. Schedule a Retirement Planning Review

Consider meeting with a financial advisor or a Fidelity Workplace Planning Consultant to review your retirement plan and provide peace of mind as you approach this new chapter. You can schedule a consultation by calling (800) 603-4015. 

Retirement planning is about more than just numbers—it’s about creating a lifestyle you’ll enjoy with confidence and security. By following this checklist, you’ll be well on your way to a smooth transition.

Sources:
Charles Schwab: 6 Things To Do If You’re Nearing Retirement
Social Security: Plan for Retirement 
U.S. Department of Labor: Retirement Toolkit